Emerging Trends in Modern Retail Formats & Customer Shopping Behavior in Indian Scenario: A Meta Analysis & Review

“If at first the Idea is not absurd, then there is no hope for it.” -Albert Einstein Aditya P. Tripathi* Abstract
The Indian retail sector is going through a transformation and this emerging market is witnessing a significant change in its growth and investment pattern. Both existing and new players are experimenting with new retail formats. Currently two popular formats hypermarkets and supermarkets are growing at a rapid pace. Apart from the brick –mortar formats, brick -click and click-click formats are also increasingly functional on the Indian retail landscape. Consumer dynamics in India is also changing and the retailers need to take note of this and formulate their strategies and tactics to deliver the exact expected value to the customer. In the backdrop of all these developments the present paper makes an attempt to:

Explain the emerging trends in the development of Modern Retail formats in Indian Context and Highlights the emerging Rural Retail Landscape and also, Reveals the Consumer Shopping Behavior (Across the Country) among the Modern Retail Formats with special reference to Delhi & NCR.

The empirical data has been collected with the help of Primary as well as secondary resources.

Key Words: Hypermarket, Convenience Store, Retailing, Malls, Shoppers Introduction India has witnessed a frenetic pace of retail development over the past five years. Goldman Sachs has estimated that the Indian Economic growth could actually exceed that of China by 2015. It is believed that the Country has potential to deliver the faster growth over the next 50 years. (1) As we all know that India has been a nation of Dukandars, having – approximately 12 million retailers. Obviously retailing is in our blood – either as a shopkeeper or as a shopper. The Indian Retail market is estimated to grow from the current US $ 330 billion to US $ 427 billion by 2010 & U. S. $ 637 by 2015. Retail which contributes 10% of our GDP is the largest source of employment after agriculture. (Annexure: 10) In the year 2004, ratio of organized-Unorganized retail was 3:97 which is expected to be 9:91 by 2010. (Annexure: 9 It is not just the global players like Wal-Mart, Tesco and Metro group are eying to capture a pie of this galloping market but also the domestic corporate behemoths like Reliance, NeelKamal, KK Modi, Aditya Birla group, and Bharti group too are at the same stage of retail development... 1

* Lecturer in Management, Department of Management Studies, Delhi School of Professional Research, G.G.S.I.P.University, Delhi. He can be reached at lkaditya1982@gmail.com

Studies &

1. India’s Economic Growth May Beat China by 2015: Goldman Sachs, Asia Pulse, February 7, 2005.

There is increased sophistication in the shopping pattern of customers, which has resulted to the emergence of big retail chains in most metros; mini metros and towns being the next target. Customer taste and preferences are changing leading to radical transformation in lifestyles and spending patterns which in turn is giving rise to new business opportunities. The generic growth is likely to be driven by changing lifestyles and by strong surge in income, which in turn will be supported by favorable demographic patterns. Development of mega malls in India is adding new dimensions to the booming retail sector. There is significant development in retail landscape not only in the metros but also in the smaller cities. Even ITC went one step ahead to revolutionize rural retail by developing ‘Choupal Sagar’; a rural mall, for the Rural India. On one hand there are groups of visionary corporate working constantly to improve upon urban shopping experience and on the other hand some companies are trying to infuse innovative retail experience into the rural Set up. Given the situation we can say that Indian Retailing is at boom. The Macro Picture: Retailer inspired by the wall-mart story of growth in small town America, are tempted to focus on smaller towns and villages in India. However, a careful analysis of the town strata-wise population, population growth, migration trends of customer spending analysis reveals a very different picture of India As per the NCAER estimates,( Annexure 7& 8) the share of the 35 towns with a present population of greater than 1 million in India’s total population would grow much faster than their smaller counterparts, from 10.2 % today to reach 14.4 % by 2025. Simultaneously, the share of these towns in retail market would grow from 21 % today to 40 % by 2025. Within these top 35 towns, an estimated 70 to 80 % of retail trade would be in the organized sector. This is similar to the experience in China where in cities like Sanghai and Beijing, the organized sector accounts for 70 to 80 % of overall retails trade in certain categories. Retailers should therefore focus on top 37 towns in the next decade, as the opportunity in smaller towns and rural India would be smaller and more fragmented as compared to the larger towns. But again this is the one side of the coin. only.


the major one & only 14% are in the upper middle class. Future Group Research. • • Source: Future Group Research. making up approx.Classification of India (Customers) on the basis of Research: Research Conducted by Future Group future group2 research classifies Indian Customers into three sets and provides a base to the retailers in segmenting the Indian market. The research shows that serving class consists of approximately 55% of the population. office peons. 2007 It indicates that retailers should target this segment (India 2) rather than focusing on India one only. . washer man etc. 2007 issue. house hold helpers. and should formulate their strategies according to the needs and expectations of serving class. in years to come. so can not afford to even aspire for good living. Unfortunately this segment will continue to be on the peripheries of the consumption cycle in India. Research indicates that for every India one at least three India Twos are there. Emerging Trends in Consumers’ Income & Consumption Pattern: NCAER study and some other data published by different research & consulting sources indicate the following trend in Consumer income and put the following projections about the Indian retailing: 3 . India 3 Struggling class It lives hand-to-mouth existence. 2. regarded as consuming class. Published in the Book “It Happened in India” by Kishore Biyani. to flourish in the market Classification of Customers India 1 Consuming Class Constitutes only 14 % • of the country’s population Most of these customers have a substantial • disposable income and they form part of usually called as the upper middle and the lower middle class • India 2 Serving Class Includes people like • drivers. liftmen. These people make life • easier and more comfortable for the consuming class or India 1. Published in “It Happened in India” by Kishore Biyani. 55 % of the population but due to low income they have a very little disposable income to spend on buying aspirational goods & services .

000. income distribution in India is unequal compared to other Asian economies. In fact. Another 75 million households are in the category of ‘well off’ immediately below the affluent. the 20 million middle class home in rural India equals the number in urban India4 and thus have the same purchasing power. with household income in excess of INR215. 000. 2006.114-15 2) Increase in the Sizable Disposable Income: Business communities believe that sizable disposable income in India is concentrated in the urban areas and well off and affluent classes. marketers have to worry about purchasing power of consumers not where do they reside. cost of doing business in rural market would be lesser.500. pp. how to serve that market profitably. Of course. the best and only statement of the structure and potential of the Indian market. and only about 20% by the top two income groups in urban areas. there is significant and considerable opportunity for organized retailers in the rural areas as well. Unlike the urban market. average number of sales outlets per haat is 300 and average sales per outlet is INR 900 and average foot fall in a haat is about 4. a total of over Rs 91.000 rural haats.1) Growing Prosperity: Making Indian Consumers Great: As per India’s Marketing White book (2006)3 by Business world.500 crore was spent. This is a sizable proportion which offers excellent opportunity for organized retailers to serve. 3) Place is no more important: The Major issue is to find out a suitable business model and retail format to fit local taste and preferences. This is. In rural India there are 50 million Kisan Credit Card (KCC) holders. For example there are nearly 42. earning between INR45. Given the increasing urban exposure of rural India. the urban and the rural upper-income groups can form an interesting continuum market. 4) Increasing Potential in Rural Markets: NCAER data shows that for 1998-99. This retailer has proved that it is important to understand how do you operate your business model rather than where you do it. for a basket of 22 FMCG products it tracks. 4 . Hence. India has around 192 million households. Marketing White book. or 115 million consumers. 3. 15. Of these. giving it a scale of 23 million households. as compared to urban market but reaching out to the mass is a concern. 000 and INR 2. Wal-Mart started in the rural market where as competition started in the urban market. 37% was spent by the two lowestincome groups in rural India. perhaps. For example the most successful and the largest incorporation. These are some of the indicators how rural India is performing well & coming up. There is no denying that the rural market holds immense promise for the organized retail but companies ponder over. only a little over six million are ‘affluent’ – that is. Business World. it is less developed in terms of infrastructural facilities. Of this. Therefore.

Over the last decade. NCAER Research on Indian Consumers. 60% of which is under 30 years of age. the average consumption spending too is low in rural areas. rural India is allocating almost 10% of the monthly household Budget for fuel & Lighting while an average urban household spends 9% under the same head.5) As per NCAER data no. 8) Fundamental Changes in Indian Economy: There are fundamental but significant changes underway in our economy.110 in cities and towns. In January 2006. Consumer spending in India has grown at over 12 percent since mid-1990s and 64 per cent of Indian GDP is accounted for by private consumption.2.394 by 2009-10 which indicates that middle class is growing and they are emerging as real customers. the average Indian spending has gone up from INR 5. bred on success will not drive the productivity but also set a spiraling effect on consumption & generation of income. This decision would certainly encourage retailers such as Zara5 5 . (Annexure: 11) . the government announced that foreign companies can own up to 51 percent of a single brand retail company. 60 a month as consumption expenditure. This means majority of the population is young and working class with higher purchasing power. After all.000 per annum in 2005-06 was 1. 6. of Household having income of < 90.( Annexure:1.19 a day or Rs. The Great Indian Consumer. compared to Rs. In value terms.14.32. 625 a month. exuberant generation. the villager has sprung a few surprises. 39 a day or Rs. such as Nike or Adidas. The low median age of population means a higher current consumption rate which augurs well for the retail sector. compared to Rs.745 in 1992-93 to INR 16. however there is a sharp difference with rural Indian households earmarking Rs. The rapid rise in incomes will lead to an even faster increase in demand for consumer durables and expendables. 7) 7) Young Population: By 2010 almost half of our citizens will be in the working age group of 20-24 years.457 in 2003-04 and is expected to grow around its trend rate of 12 per cent per annum. at Rs. (Annexure-5. Currently the country has a population of over one billion. According to the latest data on household Consumption expenditure.4) 6) Higher Proportionate Rural Expenditure: While an average Citydweller may be spending almost twice than his counter-part in rural areas but in terms of allocation of his budget to key segments.1171 a month in urban India. the ownership of goods will also go up significantly by getting empowered through rise in the size of the great Indian middle class.Still it remains attractive because of intense competition in Urban India. A youthful. 2005. Result by.249 ( 000) is projected to come down to 1.3. ________________________________________________________________________ 4.

Primary data was collected from 30 shopkeepers operating in different malls of Delhi & NCR to analyse the Customer shopping Behavior in Modern Retail Formats. Wal-Mart is highly successful in USA but the story is different in Asian countries like China. Kiddy’s. Meta Analysis & Review : Emerging Trends in Modern Retail Formats: It is difficult to fit a successful international format directly and expect a similar performance in India. and FICCI India Retail Report was referred to analyze the Emerging trends in Modern Retail Formats in Indian scenario.( 2006) .Since the study is focused on country analysis. Future Group. CSSO. hence. Therefore. Oysho and Zara Home. Massimo Dutti. CSSO. class. the retailers may go for experimentation to identify the winning format suited to different geographies and segments. so. The Global Retail Development Index. is one of the World’s largest specialty retailers with more than 3000 stores offering clothing. Considering the diversity in terms of taste and preferences prevailing in India.7 Research Design: In order to fulfill the objectives of the study primary as well as secondary data have been collected to analyze the trends in modern retail formats meticulously. Leading Spanish fashion retail chain operates the eight store formats: Zara. To analyze the emerging trends in shoppers’ behavior 30 shop keepers from 6 Malls operating in Delhi & NCR were interviewed during November 2007-Jan 2008. Pull & Bear . The lessons from multinationals expanding to new geographies also point to this. Research Design Secondary Research Conducted by NCAER. The Logic behind selecting the area of Delhi & NCR for primary data collection can be justified by the argument that due to high migration rate from different states of the country to the Delhi & NCR makes it almost representative of the entire country. Gap Inc. TSMG. For example. Berschka. Stradivarius. 7. ICRIER. for the rest part of the country secondary data published by different research institutions like TSMG. the taste in south is different from that in north and this brings challenges to 6 . For example. 6.. NCAER etc have been considered to draw the key inferences. children & babies under the Gap. Tesco is planning to enter the market through a partnership with Home Care Retail Mart Pvt Ltd and expects to open 50 stores by 2010. women. AT Kearney.and Gap6 to enter this market. it forced the researcher to pursue meta-analysis & review. Since there are very few studies in the field of retail which focus on country-analysis. The research design can be understood as follows: _______________________________________________________________________ 5. it is important for a retailer to look at local conditions and insights into the local buying behavior before shaping the format choice. accessories & personal care products for men .

Therefore. Kolkata. Shoe mart and Funcity8 etc. Blue Sky (fashion accessories). Consumers who are interested to purchase on bulk can take benefit from this format. aLL (fashion apparel for plus-size individuals). they developed another new format in the form of Wholesale Club to sell a segment of consumers. Similarly the Land mark group also operates multiple formats such as hypermarket (Max). possibly implying multiple formats could be the reality in the long run. Pantaloon Retail India Ltd is a live example of that in Indian scenario. Chennai and Pune are leading the way but the second tier cities like Ludhiana. Such experimentation and identification of an appropriate format for the local conditions would separate winners from losers in India. Chandigarh. Retail developers are in such a mood that they may over ride the requirement in a specific city. Apart from geography even rural and urban divide poses different kind of challenge to the retailer. is also promoting the Development of Modern Retail Formats: Large format malls are increasingly getting prominence 7 . departmental store (Lifestyle). Pantaloon Retail India is experimenting with several retail formats to cater to a wide segment of consumers in the market. The available research findings on retail indicate the following trends in Modern Retail formats: 1) Trial & Error: Now a number of retailers are in a mode of experimentation and trying several formats which are essentially the representation of retailing concepts to fit into the consumer mind space. Hyderabad. Bangalore. 4) Govt. Collection i (home furnishings). 2) Emergence of Wholesale Clubs: Since retailers are trying to segment the market with the help of formats. There is no denying that the top notch cities like Mumbai. Real estate developers are jumping very fast to take this further from Metro cities to smaller cities and corporate houses like ITC and Sriram group are making steady progress to make this phenomena feasible in rural markets as well. 8.the retailers. Family Entertainment Centre which offers excellent opportunity for Kid to learn and have fun. Nagpur and Surat are also catching the eye of all retailers. who purchase on bulk and look out for substantial discounts and offers. Some of the new formats are Fashion Station (popular fashion). The new format is going to be a kind of wholesale club which is likely to be located close to Food Bazaar. most of grocery retailers are region centric at this point in time. Depot (books & music) and E-Zone (Consumer electronics). 3) Increasing Acceptance of Rural Markets: Mall-mania is phenomenal in India and is spreading fast and entering even the second tier cities in India. Delhi.

In India. gift ideas and other services. Adlab and Fun Republic in large malls. health and beauty products. accessories. home décor.. the K.The store strongly focuses on lifestyle retailing and mainly divides into five departments such as apparel.747 sq ft by FY08. Hypermarkets not only offer consumers the most extensive merchandise mix. It attracts more than 12 million shoppers every year with a conversion rate of 38 per cent. In early 2006. household furniture and decor. Shoppers' Stop is the first one to open a department store in the early 1990s and currently operates 19 stores in 10 different cities in India . value apparels. ft and store provides customers a great shopping experience with three floors of apparel. Another operator Lifestyle India began operations in 1998 with its first store in Chennai in 1999 and in March 2006 it opened one of the largest department stores in the same city. footwear. Waves. One of the leading players in this format is Pantaloon Retail India Limited which operates 32 Big Bazaars in twenty cities. hypermarkets are getting overwhelming response from consumer. the hypermarkets are emerging as one of the popular formats in India. the number of department stores is less as compared to other retail formats such as supermarkets and discount stores.000 sq. 6) Hypermarkets: The Biggest Crowd Puller: Hypermarkets have emerged as the biggest crowd pullers due to the fact that regular repeat purchases are a norm at such outlets. product and brand choices under one roof. Shopper’s Stop is getting stronger and stronger year after year. do it yourself (DIY) and outdoor products. 5) Efficient Buying: Increasing Importance of Supermarkets & Discount Stores: Such a format provides the greatest selection of any general merchandize and very often serves as the anchor store in shopping mall or shopping centre. hyper city Retail plans to open 55 hypermarkets by 2015. Raheja Corp (C. As the market is expanding and consumers are in a mood to accept changes. but also create superior value for money advantages of hypermarket shopping.with adequate retail space allocated to leisure and entertainment. products for children. Raheja Group) has introduced its value retail concept hyper city which is the country’s largest hypermarket at 118000 sq ft.502. The store spreads over 75. This boosted the confidence of the mall developers to accommodate entertainment players like PVR. house ware. Number of players operating hypermarket format are increasing day by day. Currently there 8 . In the end of FY2000 this retailer had 5 stores and is in the process of reaching 39 stores with retail space of 2. With product categories on offer ranging from fresh produce and FMCG products to electronics.L. Some states like Punjab have lifted entertainment tax on multiplexes till 2009.

Some of these initiatives include : ( Jo Dikhta Hai wo hi Bikta Hai ) Live chakki: which allows customers to buy fresh wheat and have it grinded there at the store Fresh Juice counter: This provides customer to have fresh juices. In India. Soups. cut vegetables. meter of retail space with sales of 9 . It charges average to above average prices. depending on the product category and carries a moderate number of stock keeping units (SKUs). fresh. 9) Ease of Shopping & Customized Services: Order of the Day: To activate it a new format has emerged in the name of Convenience Store. fruits. Convenience stores occupied 23 thousand sq. who largely operates in the southern part of India is expanding to western India. and Adani are the leading super market operators . The objective of the store is to offer variety at affordable price in each category. Live kitchen: Customers have the option of buying vegetables. Nilgiri (30 plus stores). ARL also plans to expand its operation in the neighboring states of Rajasthan. cutlery. stationery and Gift items. cosmetics.One of the biggest super market operators in the western India is Adani Retail Limited which operates Adani super market plans to continue its journey to reach total 19 cities with the store strength of 60 plus in the state of Gujarat. Madhya Pradesh. Food Bazaar have made the transition from just a grocery retailer to developing emotional bonding with shoppers by providing some value added services to the shoppers. getting them chopped. Food Bazaar. 8) Emergence of Private-Label Brands: The private labels are offering flexibility to both the retailer and the consumer on price front. Maharashtra and Chhattisgarh. small utensils. One more retailer Reliance Retail is on the move and this retailer opened its Reliance Fresh-a super market chain with 11 stores in Hyderabad in November 2006 and is planning to enter 70 more cities within 2 years. In India Food World. Live dairy: This provides customers with fresh milk and milk products. A Convenience store offers locational advantage to the shoppers and provides ease of shopping and customized service to the shoppers. 7) Customers still rely on traditional concepts: A super market normally sells grocery. salads and sandwiches are also available at live kitchen. toiletries.are about 40 odd hypermarkets in India but this format holds a great potential for growth. Normally it remains open for long hours and shoppers use it for buying fill-in merchandize and emergency purchases. Subhiksha is one of the leading super market operators. cooked fully or partly. frozen foods.

durables. But there is scope for such kind of format. and two. But modern dollar-store retailers are having more sophisticated operations. Practically the discounters offer several advantages such as lower price. 12) Dollar Stores: Dollar stores have their roots in America's homey five-and. The same retailer Wal-Mart struggles in Asian countries like China but extremely successful in USA. food and sometimes clothing. MegaMart is one sort of category killer which sells apparel products. Generally such kind of retailers uses a self service approach. Some chains sell all their goods at $1 or less. Store 99 is the example of it in Indian Scenario. the general stores that offered a range of products at low prices. cleaning products. health and beauty supplies. in the long run success depends on the operational efficiency and consistent value delivery to the consumer. leveraging their growing buying power to strike special deals with vendors and continuously striving for unique advantage of both convenience and price. due to abundance of cheap land and the dominant car culture.about Rs 1347 million in 2005 and are expected occupy 85 thousand square meter of selling space by 2010 . household goods. excellent terms and assured supply when items are scarce. It is believed that the average Indian consumer is highly price-sensitive and looks for savings in term of money in their grocery purchase. 13) Retail Development in Rural India: A Market with Silver lining: Chennai based market research firm Francis Kanoi estimated the size of the rural market to be INR 1. Both private-label and brand-name goods fill the shelves. toys. Others offer selected items at higher prices. The discounters like Wal-Mart and Aldi were able to quickly build scale and pass on the benefits to the consumer. agri-inputs. They are looking for employing technology to manage large distribution networks.S. wider assortment and quality assurance.FMCG. Most sell a combination of paper products. 08.: The category killer concept originated in the U. category specialist can be able to “kill’ that specific category of merchandize for other retailers.000 crore annually. 10) Magnetic Effect: Discounters not Shopkeepers: Wal-Mart. In India.and four10 . In India this kind of retail stores are not prevalent at this point of time. the largest retailer in the world is a discounter. paper and stationery. 11) Category Killer: A New Concept imported from U. During the survey in 2002 the firm took into account four categories . However.S.dimes. So price-value equation is a critical component in most of the grocery purchases. Category Killer is a kind of discount specialty store that offers less variety but deep assortment of merchandise. By offering a deep assortment in a category at comparative low prices. They use their buying power to negotiate low prices.

Some internet retailers such as e Bay and rediff. animal feed and irrigation equipment among other agriculture related products. farm implements. corporate forays into rural retail are expected to bring more experimentation and innovation in term of retail format.com have to maintain their warehouse to stock products and take the responsibility of delivering 11 .com are providing a platform to vendors to sell their products online and they do not take the responsibility of delivering the product to buyer.15 lakh) is at 16. Largely this rural market is untapped and there is huge opportunity for retailers. They provide virtual shopping space to the vendors. the rural retail initiative of Godrej Agrovet Ltd operates a chain of 18 stores providing a host of services to farmers and their families and is planning to set up at least 1. seeds. Escorts rural stores. Maharashtra (annual sale Rs 40 crore). Farmer response has been extremely encouraging. Offering insurance and financial services to farmers is part of the business. M & M Shubh Labh stores. Recent Developments in Rural Retailing: Therefore. 14: e-Retailing: The importance of internet retailing is growing all over the world. data from. Rural incomes are growing steadily as well. the figure stands at 15. The Godrej Adhaar.4 million in urban India. There are about franchised Shub Labh store established in ten states in India. One of the basic objectives is to establish market linkage and optimize farm produce supply chain.com and walmart. NCAER data shows while the number of middle-class households (with annual income between Rs 45. pesticides. A centre is attracting 150 . They also have officers who offer free advices to farmers regarding best agriculture practices.wheelers for their estimation. Hariyali Kisaan Bazaar has plans to rapidly scale up the operations & create a national footprint covering all the major agricultural markets of the country. Mahindra & Mahindra Shubh Labh This is the rural initiative taken by Mahindra & Mahindra group to provide complete package of products and services related to firm productivity. At this juncture there is no conclusive evidence of winning rural retail formats available. and Warnabazaar.000 stores19 across rural India in the next five years. 22 "Hariyali" Stores have been operational in different states across North India. However. Tata Kisan Sansar. in recent times rural retailing is witnessing explorations by both corporate houses and entrepreneurs – ITC's Choupal Sagar.200 farmers a day. On the other hand online retailers like amazon.000 and Rs 2. So far. Apart from Godrej Adhar and Choupal Sagar other formats operating successfully in the rural area are.6 million18 in the rural areas. HLL's project Shakthi and Mahamaza are some of the models being tried out. DSCL Haryali Kisan Bazaar Hariyali stores keep wide range of product assortments such as fertilizers.

of Shopkeepers Interviewed 04 Reason for selecting the Mall Known as poor cousin of the original Ansal Plaza in South Delhi. we can say that we are moving from a nation of Dukandars to a Nation that loves to shop. along with cloth shopping. Emerging recent developments in the Indian Mall Development scenario include the coming up of so called Gen X Malls and Central which is a Seamless Mall. Delhi 06 12 .products to the buyer. outdoor shopping area which houses outlets of many leading national and international brands There is also a large lake that acts EDM .000 sq. Rohini. 00. So. Gen X Malls have been defined Chesterton Megharaj as greater than 5. For example Apple Inc. So. Sears and Kmart are operating online shop and some manufactures also operate online. Primary Research revealed the following results: Malls Selected for the Collection of Data Name of the Mall Ansal Plaza.ft.000 sq.com and Dell Inc. The mall has an 220.com. operates through apple. It is essentially a complex of Discount store Very crowded (no doubt because of the big Big Bazaar located in it). most of the brick and mortar stores are entering into online retailing as they have physical infrastructure and they can use that to capture additional consumer wallet. sells its products online Through dell. East Kaushambi Delhi 08 Metro Walk. Near Anand Vihar No. The target audience for the Gen X malls is tourist /out of town visitor and the person from the city looking for entertainment options. and fairly okay to spend time. All the big retailers like Target.ft and incorporate large entertainment area with enough space for parking and excellent infrastructural benefit that shall be passed on to the retailer . The report also predicts that the contribution of internet retailing to non-store retailing to is likely to be 46 per cent by 2010. Has movies and eating joints. In India internet retailing is growing by 29% CAGR and Euro-monitor report estimates that the a CAGR 48 per cent and in value term it going to touch INR 27 billion by 2010 from INR 4 billion in 2005.

Wo hi Bikta hai Envy or Demonstration Effect Price-value Equation Private-Label Brands Live culture • • Source: Generated from the Primary and secondary research published by Future Group. better products. The mall also includes a Nike store. Rajouri Garden. Mohan Nagar. Noida MMX Mall.Centerstage Mall. • A wide range of options. It is believed that Average Indian customer is highly Price-Sensitive and looks for savings in terms of money in their grocery purchase. MMX's modern facilities would not only draw the seven-lakh population of the area but also lure audiences from Noida and East Delhi The main feature of this mall is a large Lifestyle Department Store. and lower prices generate the increased desire to purchase. • Higher purchase is driven by the fear that current price offer may not be available for long-time and thus the product has to be purchased at once. • • Envy sets in when a customer sees others buying and making the best out of deal. Ghaziabad 04 03 City Square Mall. 13 . and a KFC --------------- Total 30 Source: Generated from the Questionnaire and Research Design Driving forces determining shopping behavior of Indian Customers: A Meta-Analysis of Indian Customers indicate the following factors as the driving force determining the shopping behavior & attitude of the Indian customers: Factors affecting shoppers’ behavior Greed Fear to loose opportunity Shopping behavior • Drives a customer to purchase more than what he or she need. Basically Known as a most preferred place for shopping in that area. In India the concept of Private-Label Brand is in its nascent stage and customers still rely on branded product Jo Dikhta Hai. Shivaji Place. West Delhi 05 as the separator between the mall building and the amusement park .

11.Probably this is working as deterrent factor for the growth of Supermarkets in India in a sense that they are able to attract visitors rather customers. 4. that retailers often overlook the schemes & offerings expected by the customers and tried to impose their own offerings upon customers which ultimately cause the dissatisfaction. They still prefer to buy these kind of products either from the local mobile vegetables sellers or from the nearest sabji Market. it can be concluded that: 14 . though lower middle class visits hyper markets and discount stores. 9. never shop at the same store. Conclusions & Implications: After conducting the Meta –Analysis for the Indian retailing market. 3. It was also observed on the basis of primary as well as secondary research. b) Where as customers for vegetables still believe in the past notion that vegetables sold in the open market are fresh. & other items reported that they were able to attract the Customers but conversion rate is not more than 30-40% which is again very alarming and a matter of high concern. the upper middle class frequents department stores.Key Observations: The primary data collected from the respondents. India two tends to feel alienated in environment. It is observed during the research that given the right environment and a correct emotional connect with customers. the clean and shiny environment of modern retail stores creates the perception that such stores are too expensive and exclusive. Shopkeepers dealing in apparels. on 26th January 2007and attracted the unexpected crowd. anything is possible . For India two. 8. led to the following key observations about customers’ shopping behaviour in Indian scenario among the modern retail formats: 1. 2. India two moves and finds lot of comfort in crowds. 7. Shopkeepers dealing in food items & Vegetables reported that : a) Customers for food items always expect hyper discounts & offers. 10. so they normally hesitate in visiting the stores having broader area coverage. Master and serving class employee. accessories. Research indicated that Customers feel conservative to buy fruits & Vegetable from air-conditioned supermarkets. and they usually compared the value sacrificed & received. specialty chains and super market. All the shopkeepers (interviewed) in every category reported that female customers proved to be great bargainers than their male counterparts. so they are not meant for them. Most of the retailers reported that customers were very much conscious for the value. It was observed that customers looked into Price-Value equation. Shopkeepers dealing in jewellery items reported that in case of unbranded jewellery items Indian customers still rely on their traditional jewellery merchant only. 6. 5. It played a very key role in their buying decision process. frequent by India one. as Big Bazaar did by celebrating Sabse Sasta Din .

has shown how understanding consumer can be a source of redefining business and gaining sustainable advantage.000 sq. So. most retailers look for what they are offering and how shoppers can fit into retailer’s scheme of offerings.000 sq. 11.ft. to 50. individual understanding is desirable. However. Similarly in India Pantaloon Retail runs several formats and for value retailing Big Bazaar is receiving exceptional response from the customers. ____________________________________________________________________ 9. Extra stores offer the widest range of food and non-food lines 4) Retailing in India is entirely different from western countries for that matter even from Asian counterparts. 15 . The retailer operates four different retail formats namely Express (546). 3) In the long run such strategies may not be viable.ft.ft. understanding the psyche of customer is critical to success in retailing. Studies show that upgraded Kirana stores are growing at the same rate as organized retailers. Retailers would have to create new delivery formats that can cater to the huge mass of consumers. Super store9 (446) Metro10 (160) and Extra11 (100) to cater consumer need.Aggregate level picture may be misleading. 6) Though. retailers have to acknowledge this change and also stay a step a head of the evolution curve of the Indian market. The Group also has an additional 527 stores under the One Stop fascia.1) Retailers need to think about shoppers not just about a format as understanding the shoppers’ dynamics holds the key to such a business. Approximate Store size is 7000-15000 sq. as it averages the beats and the valleys. 10. Approximate store size is 60. Sam Walton and Jack Welch share a same line of thinking that consumer is the source of competitive advantage and one of leading UK based retailers Tesco Inc. 7) Finally. tens of millions are still novice but no less avid consumers are joining the fray every year. some Indians are behaving as sophisticated shoppers.000 sq. Hence. 2) Retailers must understand what value shopper is looking for and how the retailers can deliver that desired value to the customer. 5) It is also observed that in the changing retailing environment. Size of Super Store varies from 20. it is not the format that gives business sustainability rather it is one of the vehicles to deliver the value to the customer. It is the value offering which makes Tesco so popular and profitable.ft. All the formats are profitable and each format is tailor made to fulfill customer need.

Shopping. Nitisha Patel. India Today. 7. The Global Retail Development Index (2006). Living it Up. 22. Retailing in Punjab: 2010 and beyond (2006). An image & CII study.114-115. Bijapurkar. August. R. 2 Consumer & Marketers. References: 1. Jo Dikhta Hai Wo Hi Bikta Hai. Annexure: 1 16 . few Kirana store owners find no competition because they understand what their customers want. 9. The New. astronomical sums provided their needs are satisfied. PP.31 4. 28-36. ICRIER Publication. At Kearney 10. Marketing White Book (2006) P. 109 3 FDI in Retail Sector in India. ORG Marg ( 2006) 5. Retailing in India.86 6. In brief. pp. He/She is ready to pay. Euro monitor Report. TSMG ( Tata Strategic Management Group) Analysis. sometimes. Arpita Mukherjee. Business World. In some cases. They are basically looking for an experience which is more of cognitive than physical. Improved Indian Consumer. Non-Store Retailing. entertainment and eating out are family events. 9) Indian customers have become more sensitive to quality.ICICI and AC Neilson . pp. Since these decisions are normally group decisions. Business World.2005. hence a marketer has to address family sensibilities more rigorously to woo Indian customers. 8th December. Marketing White Book (2006).pg. 2006 8. customer service and status. So ultimately it can be said that for a retailer understanding the customers is just like climbing the Greased Pole. India Retail Hand book .8) Indian consumers are still family-driven entities. 2006.237. (2003).

2005 Annexure:2 17 . Results from the NCAER’s Market Information Survey of Households.Source: The Great Indian Market. August 9.

August 9. 2005 Annexure:3 18 .Source: The Great Indian Market. Results from the NCAER’s Market Information Survey of Households.

Results from the NCAER’s Market Information Survey of Households. 2005 Annexure:4 19 . August 9.Source: The Great Indian Market.

Source: The Great Indian Market. Results from the NCAER’s Market Information Survey of Households. 2005 Annexure:5 20 . August 9.

2005 21 .Source: The Great Indian Market. August 9. Results from the NCAER’s Market Information Survey of Households.

Results from the NCAER’s Market Information Survey of Households. August 9.Annexure:6 Source: The Great Indian Market. 2005 22 .

Annexure:7 Source: The Great Indian Market. August 9. Results from the NCAER’s Market Information Survey of Households. 2005 23 .

Unorganized 97 % 91 % 100 Annexure:10 24 . TSMG Analysis Annexure:9 Share of organized and un-organized Retail in India Year 2004 2010 Organized 3% 9% 100 Source: Indian Retail Report 2005.5 2 87.2 11.4 100.2 4.5-1 mn) 32 Cities Rest of India 5500 Towns +6 lakh Villages Total 6.Annexure:8 Organized Retail Market in India Population in Crores 2005 2025 (EST) Metros of Mini Metros & Cities Top Cities (Pop: > 1mn) 27 cities Large Cities (Pop: 0.0 77 2004 73 2010 69 2015 57 2025 Source: NCEAR. CSSO.5 140.7 2.7 13 Proportion of the Total Retail Market (in %) 15 6 13 6 3 25 7 3 20 10 4 3.4 7.

Salt & Spices of Household) Urban ( % of Monthly Rural (% of Monthly Household) 9% 6% 6% 3% 10% 7% 7% 5% Cereals 9% 17% Source: The Times of India. 31 Annexure: 11 Rural-Urban Consumption Expenditure Area Allocation Fuel & Lighting Clothing (Including bedding & Footwear) Medical Care Sugar.Share of Retailing in Total Employment Country Share of Retail in Total Employment India 6-7 % China 6% Poland 12 % Brazil 15 % USA 11. February 1. ICRIER Publication Pg. 14 25 . Nitisha Patel.7 % Korea 18 % UK 11 % Malaysia 7% Source: FDI in Retail Sector in India. 2008 Pg. Arpita Mukherjee. New Delhi.

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